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Author Archives: Jeff Bergstrom

About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.

JLN Financials: The Rich Country Trap; The Economy’s Secret Success in 2013; Despite Possible Volcker Reprieve, Some Banks Move Ahead On CDO Sales Standard

First Impressions Finding Our Differences: FOA’s Anthony Belchambers Says Regulation Has Long Way to Go JohnLothianNews.com European regulatory changes continue to move forward, but there are significant differences between the US and EU, and also between the European states themselves. The Futures & Options Association’s Anthony Belchambers spoke with John Lothian News about where Europe stands in the rulemaking process and the challenges that still remain. Belchambers said that the issue of extraterritoriality continues to concern EU regulators and market participants. Watch the video » Quote of the Day The problem [during the crisis] was not any lack of smarts,…

Happy Holidays from John Lothian News Standard

Happy HolidaysFrom everyone at John Lothian News(see note below) NOTE:  The John Lothian Newsletters (Environmental/Energy, Financials and Options) will not be published from now till after the new year as we work on making the above picture happen for each of us.  The John Lothian Newsletter will be published except on Christmas Eve, Christmas Day, New Year’s Eve and New Year’s Day. Have a great and happy holiday! See you in 2014! Sincerely, JLN Staff

JLN Options: CME Seeks to Broaden Cash Options in Clearinghouse Default Rules; Forex: Set Your Expectations for FOMC Volatility, Trend; New risk index shows investors are trending toward higher greed Standard

Lead Stories CME Seeks to Broaden Cash Options in Clearinghouse Default RulesMatthew Leising – BloombergBusinessweekCME Group Inc., concerned that a new U.S. rule undermines the use of Treasuries as collateral at clearinghouses, is proposing a workaround that would make greater use of client cash. http://jlne.ws/197IHzi Forex: Set Your Expectations for FOMC Volatility, TrendForexNews.comThe dollar is close enough to significant reversals with EURUSD, GBPUSD, AUDUSD and USDJPY that the upcoming FOMC rate decision has the market’s focus completely locked in. Yet, Taper speculation doesn’t carry the level of market sway it leveraged 6 months ago; and the outcome’s influence on general…

JLN Financials: CME Sues Ex-Executive Paulhac in Breach-of-Contract Case; Confusing Signals in Chinese Financial Policy Reflect Challenges of Reform; Economic Growth in U.S. to Quicken Next Year, Lagarde Says Standard

First Impressions Happy Holidays This issue will be our final JLN Financial Newsletter of the year. Have a great holiday! We will return on January 2. Thanks for reading. JLN Financials Staff – Jon Matte, Jeff Bergstrom, Doug Ashburn and Jim Kharouf Quote of the Day “Certain elements of the proposal, if implemented as written, will create negative impacts on the markets, will further exacerbate existing differences across jurisdictions, and will not contribute to the shared goal of reducing risk in the system as a whole.” Citigroup in the story, “Central Bank Chiefs to Weigh Debt Rule Changes Amid Bank…

JLN Options: Fed Move Spells Quieter Quadruple Witching; Investing in Volatility; On Tapering, Options Speculation, and Short-Term Volatility Standard

Lead Stories Fed Move Spells Quieter Quadruple Witching Kaitlyn Kiernan – The Wall Street JournalQuadruple witching is upon us.The trading phenomenon that occurs once a quarter has the potential to jolt markets. But after big news out of the Federal Reserve midweek, that day may be shaping up to be calmer than usual.http://jlne.ws/1gL7scs Quadruple witching ahead: Expect increased volatility and volumeKate Gibson – CNBC The usual increase in volatility and volume that typically comes along with quadruple witching—the last trading day for stock options on indexes, equities and futures, with futures themselves also expiring—on Friday will be accompanied by the S&P…

JLN Financials: Chinese Interest Rates in Money Markets Jump on Friday; The Federal Reserve’s Goldilocks Universe; Covered Bonds Get Second-Class Status in EU Liquidity Review Standard

First Impressions Canary in the Paper Mine? Doug Ashburn – John Lothian News Six years ago, the failure of two hedge funds at Bear Stearns sent a small ripple through the commercial paper market. What started out looking like a temporary blip in the economic freight train ended with the failure of large swaths of the banking system, the biggest recession in 70 years, and an unprecedented policy response that continues to this day. Though the crisis had many causes – over-leverage at banks and investment banks, lax lending standards and an opaque derivatives market to name a few –…

JLN Options: Paranoia Squashed as VIX Sinks Most in Two Months on Fed; Resources pessimism may offer opportunity; Looking Ahead: The VIX in 2014 Standard

Lead Stories Paranoia Squashed as VIX Sinks Most in Two Months on FedBloombergAnother bout of market paranoia came to nothing yesterday as stock investors looked past reduced Federal Reserve stimulus and focused on assurances that interest rates would stay near zero percent.http://jlne.ws/19fQtNl Resources pessimism may offer opportunityJamie Chisholm – Financial TimesAmid the avalanche of analysts’ recommendations for the coming year, Trading Post finds the following among the more intriguing.Derivative analysts at Barclays reckon investors should take advantage of the overly pessimistic attitude towards the resources sector, alongside its relatively high long-term option implied volatility levels to sell long-dated puts in…

JLN Financials: The Fed Switches to Lite Beer; Fed Finds Elixir for Tapering QE as Markets Embrace Rate Outlook; For ETFs, Capital Gains Distributions Remain Few and Far Between Standard

First Impressions The Beverage of Choice by Doug Ashburn Today’s newsletter contains several stories using beverage euphemisms to describe yesterday’s move by the Federal Reserve to ease up slightly on its bond buying spree. A Barron’s article refers to it as “switching to Lite Beer.” Bloomberg referred to yesterday’s monster rally as having “found the elixir” that sent the market to new highs. I see it as adding more incendiary ingredients to an already dangerous cocktail of debt and malinvestment (albeit at a slightly slower pace). And I refuse to drink the Kool-aid. Quote of the Day “Taking into account…

JLN Options: Record VIX Streak Shows Dash for Hedges Before Bernanke; Wall St turns positive after Fed announces tapering; The Real Cause of the Santa Claus Rally Standard

Lead Stories Record VIX Streak Shows Dash for Hedges Before Bernanke Callie Bost, Lu Wang and Nikolaj Gammeltoft – BloombergTraders are protecting against losses after the biggest rally for stocks this decade, pushing the VIX to a record-long streak of gains as the Federal Reserve considers reducing economic stimulus.The Chicago Board Options Exchange Volatility Index has risen for 14 of the past 16 trading days, the first time that has ever happened, data compiled by Bloomberg show.http://jlne.ws/1c0KPwZ Wall St turns positive after Fed announces taperingRyan Vlastelica – ReutersU.S. stocks rose in volatile trading on Wednesday after the Federal Reserve announced…